The Sansthan was established in 15th October, 1970 as an autonomous organisation registered under the Societies Registration Act, 1860 (Act XXI of 1860) for the development and promotion of Sanskrit all over the country. It is fully funded by Government of India. It functions as an apex body for propagation and development of Sanskrit and assists the Ministry of Human Resource Development in formulating and implementing various plans and schemes for the development of Sanskrit studies. It has assumed the role of a nodal body for the effective implementation of various recommendations made by the Sanskrit Commission set up by the Government of India, Ministry of Education in 1956 to consider the propagation and development of Sanskrit language and education in all its aspects. 

     Sanskrit has played a vital role in the development of all Indian languages and in the preservation of the cultural heritage of India. No Indian language can flourish without the help of Sanskrit. Sanskrit also provides the theoretical foundation of ancient sciences. Hence, it becomes essential to preserve and propagate Sanskrit for all-round development of India. Fully conscious of this responsibility, the Govt. of India, in pursuance of the recommendations of the Sanskrit Commission (1956-57) constituted a Central Sanskrit Board, which recommended the establishment of a Rashtriya Sanskrit Sansthan. Accordingly, the Rashtriya Sanskrit Sansthan was established in October 1970 as an autonomous organisation registered under the Societies Registration Act, 1860 for the development, preservation and promotion of Sanskrit learning all over the country and abroad. The Sansthan is fully financed by the Government of India and works as a vital agency of the Central Government. 

Rashtriya Sanskrit Sansthan  has now been declared as Deemed University on the recommendation of Universtiy Grants Commission by the Ministry of Human Resource Development, Department of Higher & Secondary Education, Shastri Bhawan, New Delhi vide their notification No. 9-28/2000-U.3 dated 7^th May, 2002 .  The University Grants Commission has also notified the above declaration vide their notification No. F.6-31/2001 (CP-I) dated 13.6.2002.

      As per the Memorandum of Association, the major objectives of the Rashtriya Sanskrit Sansthan are to propagate, develop and encourage Sanskrit learning and research. This also serves as central, administrative and coordinating machinery for the management of all Kendriya Sanskrit Vidyapeethas. The Government of India has formulated various schemes and programmes for the development of Sanskrit education and is implementing these through Rashtriya Sanskrit Sansthan and other agencies. 

      For fulfillment of its objectives and execution of the schemes/programmes of the Government, the Sansthan undertakes the following activities :

Establishment of Kendriya Sanskrit Vidyapeethas in different states.
Conducting the teaching of Sanskrit on traditional lines at secondary,
    under-graduate, graduate, post-graduate and doctorate level. 
Imparting Sanskrit teacher's training at graduate level i.e. B.Ed.
Coordination of research works in various disciplines of Sanskrit learning.
Implementation of the schemes of the Ministry of HRD for promotion of
    Sanskrit.
Establishing Sanskrit libraries, manuscripts collection centers and editing
    as well as publishing the rare manuscripts and books of importance.
Running Correspondence Courses for learning Sanskrit.

      The Sansthan has entered into its new building on the auspicious occasion of the Sanskrit Day on 28th August 1996. This building is equipped with more facilities like Library, Computer Center, Modern Conference Room, Committee Room, Guest Room, Sales Center, Canteen etc. With the added facilities and support from the Ministry of Human Resource Development, Government of India, the Sansthan expects to serve the cause of Sanskrit during the coming years in a more effective way by bringing out the wealth of knowledge contained in Sanskrit Literature for the welfare of human beings and coordinating the Sanskrit studies and researches being undertaken by various institutions in the different parts of the world. 

     Prof. Ram Karan Sharma was the founder Director of the Rashtriya Sanskrit Sansthan & now Prof. Vempaty Kutumba Sastry is the Vice Chancellor of the Rashtriya Sanskrit Sansthan ( Deemed University ) from  May, 2003.  The other Directors of the Sansthan were  Shri. P.C. Sharma, Shri S.K. Chaturvedi, Shri K.K. Sethi, Shri K.K. Khuller, Dr. Mandan Mishra, Shri Priyadarshi Thakur, Dr. K.K. Mishra & Prof. V.Kutumba Sastry.